Investment Real Estate topics throughout California and sometimes further! Mario Pinedo has been a Realtor since 1991 in Silicon Valley and has sold throughout California and the West. His primary investment vehicle is multi-family rental properties. Mario focuses on major markets from San Diego, Orange County, Los Angeles, San Jose, San Francisco and northern California. He currently lives in Irvine, CA.

Friday, July 3, 2009

Mortgage Update July 2, 2009

Rates have been holding and slightly improving over the past week. Adding fuel to the fire for mortgage bonds today was a stinker of a jobs report. The Labor department reported a loss of 467,000 jobs in the month of June. The national unemployment rate rose to 9.5%, its highest since 1983. Any time there is negative economic news the safer fixed income investments such as mortgage bonds get the benefit.

On Monday of this week China, the largest holder of US debt, announced they will continue to purchase our Bonds as part of their current foreign-currency reserve policy. China holds $763B of the $6.45T in US debt. This was great for mortgage bonds as China’s buying has really helped to keep our interest rates low over the past several years. Why do they do it? They wish to devalue the Yuan against the dollar so their exports to the United States are cheaper for the American consumer. The United States is the largest buyer of manufactured goods from China, and they want to keep it that way! By weakening the Yuan against the dollar it helps to ensure that American demand for Chinese goods will remain strong. Mortgage bonds get the benefit of this when China buys our debt.

Turn times are starting to improve for conventional loans, which is great news for the purchase market. The reason is that the refinance boom came to a halt when rates went up and origination volume decreased significantly. Conventional underwriting is much faster than the past several months, but there are still delays from the new appraisal process started on May 1st of this year. Over all it’s good to see lenders getting caught up with underwriting. I would still allow extra time for condo deals and FHA. Contact us with specific scenario questions as it’s always case by case for turn times.

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Bay Area Commercial & Residential Invesment Real Estate Team

Mario Pinedo, CCIM - Commercial, Residential & Investment Realtor since 1991. Mario has been advising clients in the purchase of their home, rental properties, investment and commercial properties. He brings deep knowledge of what to buy, where to buy, how to buy and when to buy. Please ask him for his advice on your next real estate transaction. Mario is a real estate Broker and provides residential & commercial sales, leasing and lending services.

Mike Priolo - Commercial Landlord and Tenant Representative for Retail, Industrial and Office space throughout the San Francisco Bay Area. Mike has extensive knowledge throughout the industry with previous employment as a commercial real estate researcher, supporting a residential developer and processing commercial loans.

Hana Yang - Commercial and Residential investment knowledge having participated directly in projects in San Jose and Los Angeles. Projects include new installations of laundry business and single tenant NNN school facility.